SCM Chapter 6

1.
Dito Eri Basyasya (224214034)

2. Afri Lasmi Devita Sari (224414236)
3. Isti Nur Jayanti (224214036)
4. Maleaki Pandiangan (224214037)
5. Nourizalsyam Suwardi (224214038)
Logistics plays a major role in successful supply chain
management. Logistics personnel manage a host of activities,
including what someone once called “the glue that holds the
supply chain together”—transportation. The efficiency and
effectiveness with which logistics functions are performed can be a
source of profit or loss for supply chain members.
Logistics moves and stores products and materials. This
includes all inbound, outbound, internal, and external movements.
Logistics manages the flow of inputs from suppliers, the movement
of materials through different operations within the organization,
and the flow of materials out to customers. It also handles the
reverse flow, or reverse logistics, required for customer returns.
The basic function of logistics is to manage the means by which an
organization fills the gaps between members of the supply chain.
A simple way to illustrate it is shown in Figure
Professor Donald J. Bowersox is credited with the logistics
concept known as the 7-Rs: assuring that the right customer gets
the right product, in the right quantity and the right condition, at
the right place, at the right time, and at the right cost. There is no
single way for a firm to design its logistics network to meet those
seven objectives. To accomplish those goals, a firm might rely on
the oversight of a sometimes multifaceted system of distribution
centers, warehouses, and stockrooms or something much more
modest. Creating a logistics structure that satisfies an average
customer is not the answer. Neither is designing a strategy to meet
the needs of the toughest customers.
For traditional retailers, one part of that strategy is to
utilize the inventory already held at store locations. Customers
can shop online and then immediately pick up their
merchandise locally. They can also avoid shipping costs by
having items available only online sent to a retail outlet
instead of their homes. The process for returning merchandise
also involves the store. Customers can simply drop off the
items to be returned and get credit on their account.
Companies such as Home Depot and Sears have used this
method for some time.
In this chapter, we will review the six primary activities
most often considered part of an organization’s logistics function:
(1) transportation, (2) warehousing, (3) inventory control, (4)
packaging, (5) order fulfillment, and (6) returns processing.
Within these six activities are the three core functions of logistics:
(1) transportation (inbound, outbound, and internal), (2)
warehousing, and (3) distribution.
• Choice Of Modes (Land, Sea, Air)
• Intermodal
• Choice Of Transport Providers
• Options for Transportation Service Providers (Roadway, Rail,
Pipeline, Sea, Air
• Movement
• Storage
• Information Management
• in-transit inventory
Depending upon the transportation terms of the
sale, a company may also include materials or products that
are in transit as part of their inventory. Own ership of
incoming materials from suppliers or outbound shipments to
customers can be transferred at two points: the dock of the
company that is shipping them or the dock of the company
that purchased them.
There are two types of packaging: consumer packaging
and industrial or trans port packaging. Both enclose and protect
products in shipment. However, con sumer packaging is used for
display and sale to final customers. The logistics function is
concerned with what is called industrial or transport packaging.
This packaging is often not seen by the final customer. It could be
any type of container and other materials used to hold parts or
products in transit to desti nation points along the chain of supply.
Fulfillment of customer orders is a logistics process that has
multiple sub processes. An order must be received, processed,
prepared, and delivered. Order fulfillment is vital in customer
relations. The order lead time, that is the time between receipt of
the order and delivery to the customer, is often critically
important. Logistics must get the right product in the right quantity
to the right place at the right time—and do so cost-effectively.
Logistics personnel are responsible for processing
products or materials returned by customers. This is known
as reverse logistics. It includes all the processes required to
receive returned products and determine what to do with
them. When the costs associated with it become too high,
reverse logis tics can be a significant drain on profitability.
When it's done well, it can be a great way to keep customers
happy and coming back for more. Therefore, the primary
objectives of this activity are to accomplish these tasks as
efficiently and cost-effectively as possible.
The reverse logistics methods put in place must do the
following:
• Include a clear process by which customers can return parts
or products
• Identify, categorize, and count returned products
• Accommodate high variability in volumes received
• Include policies and procedures for recalls
• Determine what is eligible for restock, repair, or
remanufacture and how this is to be done
• Manage the disposal of products that cannot be reclaimed
• Manage recycling and repackaging efforts

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Dito Eri Basyasya (224214034)

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